How 2 Uncover and Shape Your Value Proposition
Our How 2 Tuesday series returned for the year with an interactive workshop with Professor Andrew Corbett! Professor Corbett is a Professor of Entrepreneurship, Babson Research Scholar and serves as Chair of the Entrepreneurship Division. He joined us to teach Babson entrepreneurs how to uncover and shape the value propositions of their businesses.
Professor Corbett began the session by asking why audience members chose to attend Babson. Responses ranged from the desire to pursue entrepreneurship to wanting to develop a global network. While the college provides the same functions for everyone, many made the decision to invest time and money based on the values they prioritized. Similarly, people will find different reasons to interact with your business. As an entrepreneur, it is important to determine the most important factors that will set your product or service apart.
When starting a venture, be sure to understand three key aspects of your business: your customer segment, value proposition, and revenue generation strategies. Who will you target first, what will you provide, and how will you get money from them? While startups iterate and change over time, be sure to understand the interaction between these essential components and adjust your value proposition as necessary.
Examples of characteristics to consider highlighting in your value proposition include:
Professor Corbett warned that listing every possible benefit that your product can provide runs the risk of overwhelming the audience. Instead, he recommends emphasizing only the one or two distinguishing factors that set you apart. To determine which benefits to highlight, he led the audience through the following activities.
- List every possible benefit your company can deliver.
- Critically analyze your list of benefits and record the three most valuable benefits your company provides to customers.
- Think about your nearest competitor and record the most valuable benefits they provide.
- Write a statement that details why your offering is better than that of your nearest competitor.
- Narrow down your company’s one or two resonating points of difference. From working with and interviewing customers, what are one or two points of value that deliver the greatest benefits to your customer?
- Think about what you are offering, who your customer is, why your product is needed, how it works, what value is delivered, when it will pay back, and how it is better than alternatives. While you may not have answers for each of these, include as many as possible to end with a strong statement of compelling reasons that someone should become your customer.
- Create a short paragraph for your target market using the answers above.
The best value propositions provide a resonating focus on the one or two benefits that your customers will value the most. Determining the most important benefits is a distillation process. Start with all the benefits you can describe, narrow them down against competitors, and get even more narrow to describe what customers want and what they will take away. Ask yourself why someone would buy from you and not an alternative. Find unique durable advantages that will excite your target market.
Conveying a powerful value proposition is crucial. Doing so will help customers understand what makes your business special and why they should buy from you. We are thrilled that Professor Corbett could lead this activity to help entrepreneurs begin to uncover their value proposition.